What is Blockchain Technology

Blockchain Technology
is a global online database that anyone, anywhere, with an internet connection,
can use. Unlike traditional databases, which are owned by central figures like
banks and governments, a Blockchain doesn’t belong to anyone. And with an
entire network looking after it, cheating the system by faking documents,
transactions and other information becomes near impossible. Here’s how it
works. Blockchains store information permanently across a network of personal
computers.

This not
only decentralizes the information, but distributes it too. So how can a
multi-purpose online database, whose users include criminals, work for everyday
use? How does it stay relatively hack-proof? The answer is Blockchain’s
millions of users. They make it difficult for any one person to take down the
network or corrupt it. The many people who run the system use their own
personal computers to hold bundles of records submitted by others. The records
are known as blocks. Each block has a time-stamp and a link to a previous
block, forming a chronological chain. It’s like a giant Google doc with one key
difference. You can view it and add to it, but you can’t change the information
that’s already there.

The Blockchain enforces this by using a form of math called cryptography, which
means records can’t be counterfeited or altered by someone else. Blockchain’s
most famous application is Bitcoin. It’s a digital currency that is created and
held electronically, and you can send it to anyone, whether you know them or
not.Bitcoin provides a level of anonymity we’ve not seen in modern times.
That’s because unlike credit cards or PayPal payments, there are no middlemen
such as banks and financial institutions asking for your personal information
and home address. Instead, people from all over the world move the digital
money by validating other people’s Bitcoin transactions, earning a small fee in
the process. Where the Blockchain comes in is verifying the ownership of this
digital cash and making sure only one person is claiming it as their own at a
time.

But it’s not
all good news for the big players, of course. Blockchain lowers the barrier for
entry into the banking industry, and that means fine tech start-ups are popping
up in pretty much every market they operate in. If banks and companies can’t
keep up, they’re putting their own survival at risk. For the consumer, the
future seems brighter with more security, less cost and better experiences.
Yet, Blockchain could be the biggest game changer for the poorest in society.
The technology is open to people living in low income countries or fragile
states at risk of economic collapse.

Take a
farmer with a small plot of land which is then flooded. The paper copy of the
deeds to his land is washed away, resulting in the farmer having no proof of
owning the land. Or perhaps he does have a digital copy on a government
database but it is erased, altered or even destroyed in a political coup.If
the farmer had filed that deed on a Blockchain, he could have avoided all these
problems. Along with speeding up the flow of cash and providing a secure place
to keep records, the benefits for the poorest in society are enormous. From
protecting our identities, to running autonomous vehicles, to managing a world
that is increasingly dependent on the internet of things, the possibilities for Blockchain technology seem endless. But whether it lives up to its promise
remains to be seen.

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